27 July 2013 12:55 PM

MANY moons ago, when working for The Guardian, I ran a story based on the prediction of my old friend Ian Angell, professor at the London School of Economics, that 'off-planet banking', with financial information stored on space satellites, was now a technical possibility and would make offshore banking look distinctly old hat. He was invited on television to discuss it - here is the relevant Youtube link

Fifteen years on, Ian makes contact to say that PayPal - the online payments service - is looking at the idea. PayPal is interested in the notion from a practical, commercial point of view, whereas Ian - Wales's only libertarian conservative - is keener on the idea that off-planet banking will starve the nation state of taxable funds and lead to a drastic shrinking of the scope of government.

In theory, there are various international conventions that declare space to be within the control of terrestrial governments, but how easy will that idea be to enforce?

In his book The New Barbarian Manifesto (Kogan Page; 1999), Ian wrote:

'Soon, under-reporting of taxes will snowball into the total migration off-planet of a state's taxation capacity...Dematerialised e-cash is the ultimate in liquidity. Along with all other information products, it will slip through politicians' grasp. Off-planet commerce will purge itself of the intermediaries who meekly report their audit trails to governments.'

1) Don't come running to us

WITH David Cameron and other world leaders on a mission to close down (or at least substantially reform) tax havens and offshore financial centres, the attractions of off-planet banking can only grow, especially as orbital technology becomes cheaper, along with the gadgetry needed by earth-bound depositors to access their funds.

As with offshore centres, of course, off-planet banking offers huge potential for fraudsters, given the difficulty of verification when one's money is eight miles high. I do hope that any fraud victims will not expect to be compensated by the public authorities. Where do they imagine the compensation will come from other than the despised sucker-taxpayers whom they cheerfully left behind in their fiscal space odyssey?

I fear, however, that, as with the wild-child son or daughter, when it all goes wrong the previously-hateful mummy and daddy/nation state will be expected to pick up the pieces.

2) Credit where it's due

BBC hacks are routinely accused of failing in their questioning ever to put the taxpayers' point of view or even of showing much sign that such a viewpoint exists. This week, however, Today pressed hard over the Government's plan to use £12 billion to underwrite £130 billion of mortgage lending. Why was the Government getting into the mortgage business? Should not the banks be doing this?

Ministers seem to believe that the credit pipeline is abnormally blocked, thus special measures are needed. OK, well if there really is a 'market failure' here (i.e. good lending risks are failing to get the funds that would be available in normal times) and Ministers have to step in, then returns on this lending ought to be above average.

The same goes for investments made by all those venture funds set up by the Business Department using taxpayers' money.

Will we, the taxpayers, enjoy above-average returns? I wouldn't bet on it.

3) You're having a laugh

READING any business story about the digital marketplace is a bizarre experience. At times I can't help thinking someone is making up all these silly names, sillier services and silliest-of-all valuations. Yahoo!, Tumblr, Facebook, Google, Instagram, Flickr, Coo-ee!, Faceache, Bumblr.

OK, I made up those last three. They don't exist. But feel free to offer me $1 billion apiece for them.

4) Boy oh boy

I can't have been the only loyal subject delighted to learn that the latest addition to the Royal family was a boy not a girl. With the change in the law of succession, we'd have been 'treated' to endless witter about 'the girl who will change history'. It would all have been horribly reminiscent of the sort of guff spouted by the fictional 'head of sustainability' Kay Hope (Amelia Bullmore) in the BBC's spoof Olympic documentary series Twenty Twelve: 'Go, women! Go, us!'

Elsewhere, I had to laugh at a headline in The Daily Telegraph announcing: 'Project normal child begins' over a picture of Kate, William and baby George. Normal children don't tend to command an entire page in a broadsheet newspaper, but never mind.

4) My, how times don't change

'Consider this report in an English newspaper: "Princess Margaret travelled last night to Balmoral as an ordinary first-class passenger in the Aberdonian night train out of King's Cross." Now, this is just the sort of thing that convinces foreigners that the English are a quiet, unexceptional people. But why, if nothing exceptional was happening, was it thought worth reporting at all? Why bother with the fact that Princess Margaret got on a train going to Scotland, something hundreds of other English people did that night?'

- David Frost and Antony Jay; To England With Love; Hodder Paperbacks; 1967

Thanks again for reading and enjoy the weekend.

dan.atkinson@live.co.uk

Going South: Why Britain Will Have A Third World Economy by 2014, by Larry Elliott and Dan Atkinson is published by Palgrave Macmillan